Identity theft and identity fraud have become increasingly serious problem as devices for engaging in financial transactions have increased in number. These fraudulent activities have become very costly to consumers, merchants, financial institutions, and others.
Prior systems provide various fraud deterrent techniques. For example, some systems ensure that payment devices are only used by authorized cardholders. As another example, some systems encrypt communications with identity information.
These fraud deterrent systems can still be improved. For example, consumers in prior systems typically provide their identity information to the merchant at a point-of sale terminal to authenticate themselves. The identity information is typically forwarded through a series of entities to authorize and process the transaction. At any point along this line of communication, identity information can be stolen or used fraudulently. For example, a wireless transmitter can be implanted in a point of sale terminal that records PINs and account numbers, and sends them back to an identity thief to be used fraudulently.
Embodiments of this disclosure address these and other problems.